For the last 4 years, the BC economy grew at 3% or more. In 2018 growth may slow slightly to 2.8%, limited partly by “bumping up against capacity constraints” (ie. running out of people to employ).
Employment
The provincial jobless rate is at its lowest in almost a decade. Since 2015 BC has added 180,000 jobs, a remarkable employment growth rate of almost 4%.
Interest Rates
The Bank of Canada raised its key overnight interest rate twice in 2017. Expect further rate hikes during 2018.
The average 5-year fixed mortgage rate is still expected to rise to only about 3.5%.
Note though that the “qualifying rate” for mortgages will be as much as 5.5% by the end of 2018.
Relief for housing supply
There are currently 39,700 residential units (mostly multi-family) under construction in the Lower Mainland. Many will complete in 2018, helping to relieve the housing supply shortage.
Exports
Other factors that may affect exports and the local economy:
- The rising Canadian dollar
- the uncertainty around NAFTA
- the softwood lumber dispute
Population Growth
BC’s population will continue to grow, but at a slower pace in Metro Vancouver. Housing concerns will push more people to the Fraser Valley.
Alberta’s rebounding economy likely means fewer workers will move from there.
Source: BCREA
